Catapulting on efforts to eliminate travel and credit card fees, the Biden administration is cracking down on corporations’ “unfair practices” that “add unnecessary headaches and hassles,” the White House said recently.
Dubbed “Time is Money,” the initiative includes various provisions the administration says will “save Americans time and money,” including new rules governing airline refunds set to take effect in the coming months.
In a press release issued Aug. 10, the administration detailed two Consumer Financial Protection Bureau rules related to artificial intelligence, including one that would require companies make it possible to talk to a human customer service agent with the click of a button, thus helping consumers avoid customer service “doom loops.” A second rule would identify when automated chatbots or AI voice recordings are unlawful, including when customers assume they’re speaking with a human being.
According to an agency spokesperson, the CFPB only has jurisdiction over consumer financial products, so the rules would not regulate hotels or airlines. “The Consumer Financial Protection Bureau (CFPB) will initiate a rulemaking process that would require companies under its jurisdiction to let customers talk to a human by pressing a single button,” the White House said in a fact sheet. According to the CFPB, companies under its jurisdiction would include banks like Chase, Citibank and Wells Fargo, which issue credit cards.
“The CFPB has been hearing for years about frustrations with customer service in banking – from getting trapped in phone tree doom loops to an inability to get past a bank chatbot,” a CFPB spokesperson said via email. “The CFPB is looking at ways to make it easy and straightforward for consumers to get past a recording or AI and reach a human to resolve customer service issues with their financial institution.”
Approximately 37% of Americans interacted with a bank’s chatbot in 2022, according to CFPB data.
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“Much of the industry uses simple rule-based chatbots with either decision tree logic or databases of keywords or emojis that trigger preset, limited responses or route customers to Frequently Asked Questions,” the CFPB spokesperson said. “Other institutions have built their own chatbots by training algorithms with real customer conversations and chat logs. The banking industry has recently begun adopting advanced technologies, such as generative chatbots, to support customer service needs.”
A third rule from the Federal Trade Commission would prohibit illicit review and endorsement practices such as using fake reviews, suppressing honest negative reviews and paying for positive reviews.
“This rule can have a big impact in the travel industry,” a White House spokesperson said via email. “Agencies are beginning work on these initiatives, and we’ll see action over the course of this year.”
Additionally, the Biden administration touted already-passed legislation on airline refunds, reiterating in the press release a rule requiring airlines to issue refunds automatically when a traveler is owed one in cases where a flight is canceled or significantly delayed and the passenger chooses not to travel — regardless of the reason.
“This rule prevents airlines from switching up their policies to make it hard to get your money back when they don’t deliver and requires them to tell you when you’re owed a refund,” the Aug. 10 press release said. “DOT’s rule also puts an end to airline runarounds by requiring refunds to be automatic, prompt, in the original form of payment, and for the full amount paid.” The rule, which was included in the 2024 Federal Aviation Administration Reauthorization Act, goes into effect in October.
The White House has actively approached airlines and other private sector companies as part of a larger consumer protection push against “junk fees.” For example, the DOT recently issued a rule governing family seating on commercial flights and has been outspoken about the protections airlines offer amid disruptions.
In late April, the department also issued a regulation requiring airlines to more transparently disclose add-on fees that a federal appeals court temporarily halted.
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